Geopolitical Uncertainty and Economic Shifts: Bitcoin’s Struggle to Compete with Gold

But as we know, reality rarely follows a trader’s playbook. Escalating conflict in the Middle East has started to push up the price of crude oil. This throws additional uncertainty over what could be a worsening economic outlook, just ahead of a crucial American election. The number of unknowns is rising, and Bitcoin’s price action continues to prove that it is still far from being seen as a ‘risk-off’ asset comparable to gold. As Bitcoin’s price predictably retreated, Gold rallied. The BTC-Gold flippening is clearly a long way off.

However, it is not all doom and gloom. Bitcoin recorded both a higher low in early September compared to the previous August low and a higher high compared to one month ago. Also, the impact of rate cuts is only slowly starting to impact markets. The rate cuts will certainly benefit Decentralized Finance (DeFi) protocols which will once again be able to compete with their higher yields against now lower-yielding, but far more secure Government bonds.

DeFi Revival and Bullish Optimism Signal Hope for Crypto and Bitcoin in Uptober

The mood in markets has slightly shifted away from the misery that many participants felt earlier in the summer. The launch of the much-anticipated Eigenlayer token has so far played out better than some had expected. A slow renaissance of DeFi tokens is starting to register. And even a hippo-themed Memecoin rallied to a $300m market cap in 2 days before retracing. Bullish traders continue to test the waters. Earlier in the year, the bulls had exhausted their buying power when the market rally fizzled out. Now it might be the bears who have nothing left to sell. Maybe not all hope is lost for an Uptober rally after all.

Conclusion

As October progresses, the crypto market continues to face a mix of challenges and opportunities. While geopolitical tensions and economic uncertainties have dampened some of the initial enthusiasm surrounding ‘Uptober,’ there are still positive signs that shouldn’t be overlooked. Bitcoin’s higher lows and higher highs suggest resilience, and the impact of Federal Reserve rate cuts may take time to fully materialize, potentially fueling further growth. The revival of DeFi tokens and bullish market sentiment also points to a renewed optimism among traders. While volatility is expected, the possibility of bitcoin in an Uptober rally is still within reach—though it may unfold more gradually than some anticipated. In a market full of unknowns, patience and adaptability will be key.

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The post The Myth of Uptober and Bitcoin: Will Crypto Defy Market Turbulence? appeared first on Coinrule.

Halloween is that period of the year when streets are full of ghosts and monsters. At a closer look, they are just kids asking for candies. If you look closely at the latest “spooky” Bitcoin’s dip, you will find many bullish elements as well.

As anticipated, the market was looking for a retest of the first support area . During a retest, the magnitude of the price move does matter! This week Bitcoin dipped below the psychological level of $60,000 just to find another support right above the previous consolidation area.

The price then rebounded back above the breakout level. This kind of price action implies a solid amount of buyer and demand. On the other hand, sellers may not have been satisfied by such a meagre drop from all-time high. Should they manage to push the price to a new lower low, that would open to a more severe drawdown that will allow them to buy back at more convenient prices. The fight is on, and it could lead to a period of sideways moves between $57,000 and $64,000.

What about Alts? They will undoubtedly be those that will benefit the most from this scenario. The rally of Altcoins in BTC prices started precisely at the top of the latest Bitcoin’s run. As the trend began to weaken, investors and traders rotated back their allocation in Alts.

How long will this Alt-party last? Time will tell. Meanwhile, it’s worth continuing to keep an eye on the Bitcoin Dominance chart compared to Bitcoin’s price. This is the single best indicator to optimise your portfolio allocation and boost your returns in times of lower volatility .

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The market always fills the gaps.

Gaps are not common in the crypto market. But, as Bitcoin gain mainstream adoption and more investment vehicles get listed on traditional financial markets, these elements can play a relevant role in how its price moves. Gaps signal strong price reversals and point at suitable price levels that traders can use as support and resistance .

The chart shows the Bitcoin future price as it traded on the CME . The gap around $60,000 in April marked the local price top. The price retested immediately the same level after, and when it failed to break out, the trend lost steam and reversed.

The same is happening these days, the other way around. After breaking above, pushing Bitcoin to a new all-time high, the price pulled back to retest the buyers’ confidence. Should the price hold, the road to $100,000 will be smoother.

Be patient. The chart also includes the other three relevant gaps in the market. Keep them in mind as guidance to place your stop losses. Bonus fact, the BTC ETF is already driving up significantly the trading volume , making this chart always more significant from now on.

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Investors and traders are people with emotions, fears, and biases. To overcome the uncertainty of every aspect of daily life, they need things that give them a feeling of safety. Bear market, Bull market, Or?

Assigning a specific “label” to events, objects, or other people’s behavior helps everyone categorize what happens around us to fit our mind schemes.

When trading, often happens the same process. It has been weeks now that traders struggle to answer the question, are we in a bear market?

Why is that so important to assign a label to current market conditions when you need to look at the price?

Interestingly, in 2019, the price of Bitcoin increased by 200%, but no one recalls a Bull market in 2021, even if such performances in any other asset class may have been well labeled so. That’s likely because crypto price moves have a different scale.

Fibonacci retracements are a valuable way to gauge the magnitude of a price move. Despite the 200% surge, Bitcoin only retraced 61% of the drowdown experienced during the Bear market. Applying the same logic to the current price action, Bitcoin has found support precisely around the same 61% level calculated from the bottom in September 2020.

Should the current support hold, the label “Bear market” will be archived quickly, again.

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Did you buy the dip? If so, whose dip?

Altcoins have rebounded strongly since last week’s lows, with Bitcoin looking much weaker and uncertain about which direction to take. That is consistent with the thesis presented in our recent post. We outlined how Bitcoin could trade sideways for a while, giving the market another opportunity for another mini-Altseason.

The chart compares Bitcoin’s price (above) in parallel with the total market capitalization of cryptocurrencies (excluding Bitcoin ) divided by BTC’s market cap

This indicates quite clearly under and overperformances of the market versus Bitcoin .

Looking at the chart, Altcoins seem to have held quite firmly considering the Bitcoin’s plunge, ending up capitulating only when the market volatility hit extreme levels. After the (local) bottom was in place, traders and investors rushed into buying back the coins that they were forced to fire-sell just a few days earlier. Experienced market participants have been able to buy back at a lower price, others, unfortunately at higher.

This is the typical wealth redistribution in these cases, from those that panic-sell to those who patiently wait to buy dips. Hate it, or love it, that’s the market.

What’s next? Despite the sharp rebound, Altcoins didn’t manage to regain the steep uptrend. They have been trading in for weeks. If this doesn’t happen soon, their momentum could deteriorate. In that case, that could be an opportunity to rotate back into Bitcoin , providing the right amount of fuel to break once and for all the $60,000 resistance.

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Everyone is trying to figure out what will be the peak of the current Bull Market. However, when investing, you need to be forward-looking and think ahead. While the price target for the current market cycle is still very uncertain, it may be easier to foresee what will be the price floor of the next bear market.

Looking at the previous cycles, in both cases, the parabolic uptrend had a brief re-accumulation phase at around half of the way. The price level at which that consolidation happens market years after the same level at which the Bear market followed found its final support.

What if the current sideways price action on Bitcoin anticipates a more significant price drop instead of a new leg up? That is possible, yet unlikely. Usually, parabolic uptrends end up in a much sharper way. On-chain data and the macro environment are still positive, and that could offer a supportive tailwind for months.

Why predicting the bottom of the next Bear market is important? Because knowing that you have the chance to buy below such levels adds significant upside to your investment and will protect your allocation in future drawdowns. Short-term volatility may push prices slightly lower, but dollar-cost averaging Bitcoin may be a very interesting long-term strategy.

The best time to accumulate Bitcoin was years ago. The second-best time may be now.

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